Supermarket Giants Face $10 Million Fines Over Competition Concerns
Australia’s two largest supermarket chains have been criticized for pressuring suppliers to reduce costs.
Major Australian supermarkets could face fines of up to $10 million (US$6.57 million) for misconduct as part of a proposal to implement a mandatory code of conduct in the sector.
Emerson recommended that the government establish a mandatory code for all supermarkets with annual turnovers exceeding $5 billion, encompassing major companies like Woolworths, Aldi, Coles, and wholesaler Metcash.
Under the proposed mandatory code, the Australian Competition and Consumer Commission (ACCC) would have the authority to enforce penalties against entities violating the code.
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The report recommended raising the maximum penalty to $10 million, three times the value of the breach’s benefit, or 10 percent of the company’s annual turnover for severe violations, and 600 penalty units (around $187,800) for minor infractions.
Emerson also proposed the creation of ‘Code Mediators’ to assist in resolving disputes between supermarkets and suppliers under the mandatory code.
The mandatory code would also offer increased protection against retaliation from supermarkets against suppliers who raise concerns about their business practices.
Following the report’s release, Prime Minister Anthony Albanese emphasized the government’s commitment to ensuring fairness for families and farmers.
One spokesperson from Coles reiterated the company’s dedication to upholding the code of conduct while delivering value to customers and maintaining strong supplier relationships.
Another spokesperson from Woolworths supported the proposal for a mandatory code and suggested extending its application to all major retailers and wholesalers to enhance public trust and establish a fair playing field.
The report advised against breaking up large supermarket chains through “forced divestiture,” as this could worsen the situation by reducing competition and potentially leading to job losses.
The former minister expressed confidence that a mandatory code was a more effective method of safeguarding supplier interests.
In contrast to the report’s recommendations, the Australian Greens and Coalition are considering introducing divestiture into Australian competition law.
